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Farm Bill; Budget; Ag Economy; RFS; and, Biotech

Farm Bill- Policy Issues

Mike Lillis reported yesterday at The Hill Online that, “The top Democrat on the House Agriculture Committee has launched a new strategy for passing a farm bill this year: threaten to send milk prices skyrocketing.

“Rep. Collin Peterson (D-Minn.) said he called Secretary of Agriculture Tom Vilsack this week suggesting that the agency begin the process of implementing the 1949-era dairy policies that would take effect Oct. 1 if Congress fails to act on a farm bill before then.

“‘Clearly this is not going to get done by the 1st of October, so my suggestion to the secretary is that they should start now putting the framework together to implement the permanent law on dairy Jan. 1,’ Peterson said Wednesday in the Capitol. ‘And it sounds to me like they’re going to take a very serious look at that.’”

Mr. Lillis explained that, “The 1949 law requires the Agriculture Department to manipulate the dairy market in such a way that milk is priced at a floor of roughly $39 per 100 pounds – a figure that would lead milk prices to roughly double at today’s rates.

“Peterson’s strategy is not to see that happen, but to rouse the affected industry groups – particularly the powerful International Dairy Foods Association (IDFA) – into pressuring  Speaker John Boehner (R-Ohio) and other GOP leaders to enact a bill preventing the cost hike.

“‘IDFA is really going to hate this,’ Peterson said. ‘And once Vilsack’s calling them and setting up the mechanism to get $39 milk, IDFA’s going to call Boehner. So, it might actually work.’”

The Hill article added that, “Peterson said his strategy has the backing of House Minority Leader Nancy Pelosi (D-Calif.).”

Mr. Lillis noted that, “[House Ag Committee Chairman Frank Lucas (R., Okla.)] said leaders have not yet started whipping the food stamp cutting bill they plan to bring to the floor next week. He said even if House Majority Leader Eric Cantor (R-Va.) cannot get 217 votes for the measure cutting $40 billion, a farm bill conference committee would proceed.”

Meanwhile, Arthur Delaney reported earlier this week at the Huffington Post that, “The debate in Congress over whether the United States should bomb Syria may be diverting attention from the economy at home. While the House and Senate hold hearings on authorizing military force, a bill that would cut food stamps is headed to the House floor next week with relatively little fanfare.

“‘There are 50 million people in the United States of America who are hungry, 17 million are kids,’ Rep. Jim McGovern (D-Mass.) said in an interview. ‘It is something we all should be ashamed of, and the United States House of Representatives is about to make that worse. This is a big deal and my hope is that we’ll treat it as such and not just let it go by without a lot of discussion and debate because we’re all focused on Syria.’”

The article indicated that, “‘There’s not been a single hearing on food stamps at all. Not one,’ said McGovern, one of the panel’s most outspoken opponents of cutting nutrition assistance. (The previous Congress, which wrapped up last year, held several hearings on nutrition legislation, though McGovern notes that the Agriculture Committee’s membership has since changed.) ‘I hope through all this Syria stuff, that we’re able to shed a bit of light on this, because I think most Americans, if they realize what’s going on, would be outraged.’”

Also, the Huffington Post article pointed out that, “‘By encouraging people to engage in job training or workfare we can help those in the program build the skills and gain the experience they need to become self-sufficient in the future,’ Cantor spokesman Rory Cooper said in an email. Responding to McGovern’s comment about hungry children, he added: ‘We are protecting this program for those 17 million kids and those who need it most. That type of fear mongering has no place in this important debate.’”

Forrest Laws noted earlier this week at the Farm Press Blog that, “The Congress of the United States cannot pass a bill aimed at feeding the country because some of its members won’t recognize a percentage of its citizens go to bed hungry most nights.

“House Agriculture Committee Chairman Frank Lucas, who has shown the patience of Job during the long months of maneuvering over the farm bill, summed up the situation very succinctly in a meeting with his constituents the other day:

“‘It shouldn’t be this hard to pass a farm bill that makes sure we have food.’”

And Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Rep. Phil Roe (R-Tenn.) on Tuesday proposed legislation that would require people using federal food stamps to buy only healthy food.

“The Healthy Food Choices Act, H.R. 3073, reflects a long-standing criticism that the government’s Supplemental Nutrition Assistance Program (SNAP) allows people to buy billions of dollars worth of junk food.”

More broadly, Jennifer Rubin indicated yesterday at the Right Turn Blog (Washington Post) that, “A short time ago I [Ms. Rubin] wrote about the House GOP’s falling out with Heritage Action over the latter’s skulduggery over the farm bill.”

Ms. Rubin pointed out that, “The transformation of Heritage from a source of intellectually honest and consistent conservative scholarship to renegade anti-Republican and anti-sane governance is a remarkable, and very sad thing to watch.”

An in-depth article by Matt Fuller yesterday at Roll Call Online pointed out that, “‘Heritage Action and Club for Growth are slowly becoming irrelevant Neanderthals,’ one senior GOP aide said.”

Jake Sherman and John Bresnahan reported yesterday at Politico that, “It’s a pattern that’s played out over the course of this Congress. [House Speaker John Boehner (R., Ohio)] and [Majority Leader Eric Cantor (R., Va.)] propose a plan, announce a vote and conservatives bail.

“Boehner and Cantor have spoken about the need for immigration reform, yet there’s not a shred of urgency among House Republicans to pass it. The two GOP leaders endorsed Obama’s proposal to launch military attacks on Syria, yet just a few dozen Republicans — at most — agreed with them. The farm bill that Cantor oversaw remains unfinished. The appropriations process has been a debacle, as House Republicans have violated their own budget guidelines. And in private discussions, GOP leadership aides acknowledge they have absolutely no idea how they’ll lift the $16.7 trillion debt ceiling. That deadline hits in mid-October.”

In other developments, National Farmers Union President Roger Johnson indicated in a news release yesterday that, “There has been discussion on Capitol Hill that an extension would be a solution to farm program legislation as we approach the Sept. 30 expiration of the one-year extension already passed last year to the 2008 Farm Bill. This is not an acceptable solution.”

American Farm Bureau President Bob Stallman noted yesterday on the AgriTalk radio program with Mike Adams that, “There’s still time to get the job done.  There’s still time to get the farm bill passed.  The process appears now, with what’s going to happen, according to Mr. Cantor, next week, to be moving forward.  But talking about an extension at this point…[i]t’s not necessary.  There’s still time to get the work done, and that’s what we’re going to encourage them to do.”

And on the issue of crop insurance, Mr. Stallman explained that, “You buy an insurance policy on your house every year praying that you never have to use it.  And on farming and ranching it’s the same thing.  We may be buying these insurance policies for a long period of time before dynamics occur that allow us to tap into thatNow if you want to look at the 2012 crop year, it would have been an unmitigated economic disaster had we not had crop insurance in place, and so it’s already proven its worth.”

Ron Hays reported earlier this week at The Oklahoma Farm Report Online that, “A lot of people are taking pot shots at the crop insurance industry and those characterizations may not be fair says Tom Zacharias of National Crop Insurance Services. He spoke to attendees at the Ag Issues Summit in Oklahoma City.”

Mr. Hays talked with Dr. Zacharias about the current critics of the crop insurance programs and an audio replay of that discussion can be heard here.

The critics of the program look at this in a short-term perspective. They don’t look long term when they think about it…Agriculture is important. It’s fundamental to the economy. It’s fundamental to the regions that are agriculturally based. So to have a safety net that supports that and promotes financial stability for our farmers, this is a critical issue for us,” Dr. Zacharias said.

And a statement yesterday from Dr. Zacharias in response to the Bloomberg News series on crop insurance indicated that: “Over the last decade, elected officials, financial institutions, farm leaders and farmers have reached a general consensus that crop insurance is the best risk management tool available. That conclusion was reached because crop insurance reduces the risk exposure to taxpayers while requiring farmers to purchase policies with their own money before enjoying the relative protection of insurance. In short, it forces farmers to manage risk before, not after it happens, which saves taxpayers money.

The factual errors, blatant omissions and obvious bias in this series were stunning and it is unfortunate that the editors of Bloomberg News agreed to release these stories publicly. It was a great disservice to their readers and a personal insult to the hardworking farmers and ranchers of this nation.”

Also yesterday, on a separate policy issue, Chris Clayton reported at the DTN Ag Policy Blog that, “A federal judge early Wednesday denied a preliminary injunction request in the lawsuit over USDA’s country-of-origin labeling rule.

“According to National Farmers Union and the U.S. Cattlemen’s Association, a district judge denied a request by COOL opponents to temporarily block the rule from going into effect. Plaintiffs had asked for the rule to be blocked until the litigation was settled.

“‘The judge’s ruling to deny the injunction on COOL regulations continues to reinforce NFU’s positive position on COOL,’ said NFU President Roger Johnson.”

And, a news release yesterday from the House Committee on Transportation and Infrastructure stated that, “Committee leaders today introduced unprecedented bipartisan water resources reform legislation that cuts federal red tape and bureaucracy, streamlines the infrastructure project delivery process, promotes fiscal responsibility, and strengthens our water transportation networks to promote America’s competitiveness, prosperity, and economic growth.

“H.R. 3080, the Water Resources Reform and Development Act of 2013 (WRRDA), was introduced in the House by Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA), Committee Ranking Member Nick J. Rahall, II (D-WV), Water Resources and Environment Subcommittee Chairman Bob Gibbs (R-OH), and Subcommittee Ranking Member Tim Bishop (D-NY).”



Paul Kane reported on the front page of today’s Washington Post that, “With a government shutdown looming in less than three weeks, Republican House leaders conceded Wednesday that they have yet to muster enough votes to approve a plan to keep federal agencies open.

“A vote on the measure, set for Thursday, was postponed until at least next week after conservatives balked, demanding that any deal to fund the government include a provision to cut off funding for President Obama’s signature health-care initiative.

“Unless Congress acts, the government will shut down Oct. 1. The Treasury also faces a potential default as soon as Oct. 18, according to independent estimates.”

The Post article stated that, “Despite the criticism from their ranks, senior Republicans — who have witnessed numerous implosions in the past two years on everything from spending legislation to tax measures to the farm bill — said the situation has not reached those depths.

“‘It’s not time to panic,’ Rep. Harold Rogers (Ky.), chairman of the House Appropriations Committee, told reporters.”

And Billy House reported yesterday at National Journal Online that, “With big deadlines and political hurdles looming over fights to keep the government funded and hike the nation’s borrowing limit, a meeting Thursday of the top four congressional leaders could set the tone for the autumn.

“It will be the first get-together for Senate Majority Leader Harry Reid, D-Nev., Minority Leader Mitch McConnell, R-Ky., House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif., since Congress returned from its summer recess. The closed-door setting for this kickoff meeting will be Boehner’s office at the Capitol.”


Agricultural Economy

Emiko Terazono reported yesterday at The Financial Times Online that, “More money to spend and a growing taste for meat on the dinner table are transforming China’s appetite for corn imports. The effect on global food markets could be profound.

“Under Beijing’s policy of ‘self-sufficiency’, corn imports, along with rice and wheat, have been kept to a minimum since China lowered its import barriers in 2001. The soyabean market, in contrast, was opened up to imports to release land for the key staples, and China has become the world’s largest importer of the oilseed.

“But the world’s corn traders are feeling more upbeat as growing demand for livestock feed has brought a steady rise in corn imports.”

The FT article pointed out that, “In the long term, ‘China, currently representing over 75 per cent of global seaborne trade in soyabeans, will also become a major importer of corn,’ says Chris Mahoney, head of agriculture at Glencore Xstrata.

“A change in tone from Beijing is supportive of this view. Last year, Chinese agriculture minister Han Changfu wrote in an article that China would not allow itself to become dependent on foreign supplies and corn ‘should not become the second soyabean’. More recently, Mr Han said corn imports would have to rise gradually in order to meet feed demand.”

Bloomberg writer Phoebe Sedgman reported yesterday that, “Soybeans advanced for a second day on speculation the U.S. Department of Agriculture will cut its domestic crop estimate today after dry weather in the past month curbed yields…[U].S. farmers may harvest 3.13 billion bushels of soybeans, 3.7 percent less than estimated by the USDA a month ago, according to a Bloomberg survey of analysts. Conditions in August signal a large cut to expected production, curbing the decline in soybean prices in coming months, Goldman Sachs Group Inc. said yesterday.”

Also, an AFP article from yesterday reported that, “One third of the food produced worldwide is wasted, costing the global economy around $750 billion (570 billion euros) a year, a new report by the UN food agency said Wednesday.”

And an editorial posted yesterday at The Wall Street Journal Online stated that, “The U.S. economy received some rare good news from Washington late last week when the federal Committee on Foreign Investment in the United States (Cfius) gave the green light to Shuanghui of China to buy the giant American pork producer, Smithfield Foods…[I]f the U.S. bureaucracy had declared that even a friendly takeover of a meat processor posed a security threat, no foreign investment in the U.S. would have been immune to this new political obstacle. That would have set a terrible precedent, but with this Administration you never know when politics will trump economic benefit.

“That also goes for Congress, where various worthies have pronounced alarm about the purchase and food safety, and now about the Cfius decision.”


RFS- Renewable Fuel Standard, Biofuels

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Chances are Congress will make a run at reforming the Renewable Fuels Standard before the end of the year, an official with the Advanced Biofuels Association told an audience at the National Advanced Biofuels Conference in Omaha Wednesday.

“Most importantly, those members of Congress who have been leading the debate in recent months, including the drafting of a series of white papers on various aspects of the RFS and committee hearings, have assured the industry that the RFS will not be repealed.”

The DTN article stated that, “There have been reports that House Majority Leader Eric Cantor, R-Va., has suggested RFS reform could be tied to the continuing resolution debate.

“[Michael McAdams, president of the Advanced Biofuels Association] said Cantor is ‘personally actively engaged in this issue.’”

Bloomberg writer Mario Parker reported on Tuesday that, “Valero Energy Corp., the world’s largest independent refining company, called on the Obama administration to waive the country’s biofuel target immediately, saying the cost to reach it has skyrocketed.

“‘We need the waiver now,’ Valero Chief Executive Officer Bill Klesse, said in a letter to Environmental Protection Agency Administrator Gina McCarthy, dated yesterday. Valero is also the third-largest U.S. ethanol producer, after Archer-Daniels-Midland Co. and Poet LLC.”

And AP writer Juergen Baetz reported yesterday that, “The European Parliament voted Wednesday to significantly reduce the amount of biofuels made from food crops by 2020 to counter concerns over the energy source’s environmental and ethical sustainability.”



Reuters writer Carey Gillam reported yesterday that, “Agriculture officials in Washington state are testing samples of alfalfa after a farmer reported his hay was rejected for export because it tested positive for a genetically modified trait that was not supposed to be in his crop.”

And Tarini Parti and Jenny Hopkinson reported yesterday at Politico that, “Big money is making a comeback in the GMO-labeling battle, but opponents argue that the food industry’s dollars might not carry as much weight this time around.

“The most prominent opponents of GMO labeling, Monsanto and DuPont Pioneer, wrote $4.5 million and $3.2 million checks, respectively, this week to fund the campaign against I-522, a labeling ballot initiative in Washington, the state’s campaign finance disclosures show.”

Keith Good